Fed and The Markets

Here is one post that I had originally published in October before Fed aggressively started its journey of cutting interest rates. Since then “China” stocks have plummeted big time and gold is nearly +30% since then. Even if you read this post earlier, you may want to re-read it to develop your own perspective in the current scenario and change the “rate cut numbers”. Widely anticipated is 75basis points, a surprise element will be full 1 point cut.

screenhunter_01-mar-18-1039.gifBear Stearns had a major impact on the markets yesterday which was muted by positive close. Goldman sachs and Lehman will pretty much set the tone for the day. There is Housing starts data and PPI to released at 8:30US EST…a lot to add to the volatility. (The picture is from Reuters, Thanks).
An expiration reminder (Thank you ToS)…

March expiration is Thursday, the 20th, which is one day early because of the Good Friday holiday. The last trading day for many cash-settled index options such as DJX, SPX, NDX and MNX options is Wednesday, March 19th, with settlement prices determined by Thursday morning’s opening prints for the component stocks. The last trading day for the OEX, XEO, ETFs and all equity options is Thursday, March 20th. IMPORTANT NOTE: the threshold for automatic exercise of stock-settled in the money options is $.05. Long equity options in the money by $.05 or more will be automatically exercised. Please monitor all your expiring positions. Be especially careful with the estimated $.30 DIA and $.50 SPY dividend on Thursday morning.

Trade carefully and trade profitably, OP






2 responses to “Fed and The Markets”

  1. Options Strategery Avatar

    Great picture. That’s how I’d feel if my equity stake was wiped out.

  2. OptionPundit Avatar

    Options Strategery, yeah that’s true and quite saddening to see the demise of BSC. Let’s hope it doesn’t happen to others as they now have a window that might have allowed them “creative accounting” to buy time and find solution before next quarter hit.

    Tony, Thanks for the wishes/comment.

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